Summary
There are many ways to move towards a living income through policy levers. One of these is by collaborating to identify price-mechanisms and policies to improve farmers’ living income. A prominent example of this is the Living Income Differential (LID) in West Africa.
The LID was the result of a joint initiative of the Ivorian and Ghanaian governments to address the sharp drop in world market cocoa prices, which reduced farmers’ incomes and governments’ revenues from cocoa. The LID is a $400 per tonne premium on cocoa exports, paid on top of the world market price. This case study describes the process of the LID’s development from a planned floor price, which was changed into a premium on the export price and which initiated public-private discussions about an Economic Pact. It heavily involved governments in producer countries, those in exporting countries, companies (both leaders and laggards) and civil society.
This case yielded several lessons for policy-oriented living income practitioners, including the need to:
- understand how the future market functions and put pressure on market actors to develop trading systems which support living income-oriented measures
- look beyond premiums alone, and combine action with other supportive policies such as stabilisation funds and supply management
- look at sector-specific living income interventions in a wider context
- involve more (cocoa) producing countries and other stakeholders in future initiatives
- allow company activities for parts of markets – provided there is full transparency
- consider regulations in consuming countries and how this might influence ‘farmer-friendly’ procurement practices
In this session, we unpacked the LID case study in depth, before a panel of practitioners shared their own reflections and answered questions from participants. Watch the recording below.
Moderator:
- Stephanie Daniels, Senior Program Director, Sustainable Food Lab
Speakers:
- Joost Backer, Lead Project Researcher
- Friedel Hütz-Adams, Senior Researcher, SÜDWIND e.V. – Institut für Ökonomie und Ökumene
- Alex Assanvo Arnaud, Executive Secretary, Côte d’Ivoire and Ghana Cocoa Initiative
- Solomon Boateng, Executive Secretary, Kuapa Kokoo Farmers Union
- Joseph Bandanaa, Regional Advisor – Africa, Swiss Sustainable Coffee Platform & Country Lead, Ghana, Swiss Platform for Sustainable Cocoa